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How to Buy House at Auction

How to Buy House at Auction and How it Works? - Auction houses: how to buy, how to follow and information to evaluate before participating in the sale.

A court auction is a unique opportunity to save on the purchase of a house because the proposed price is usually lower than the real value of the property. Thanks to the many occasions offered at the auction, you finally have the opportunity to live in areas that you could never consider for the high purchase costs. So, with this kind of sale, you can make your dream a reality. But you want to be sure of your choice and better know how to buy a house at the court auction.

Of course, buying a house at auction is not that simple, but you will have to evaluate several aspects before participating in the auction. Otherwise, you'd be in danger of running into problems. That's why we chose to write this guide, where you'll find some useful information about:

  • what documents to consult to participate in an auction;
  • what to do before participating in an auction;
  • how an auction works;
  • who can participate in an auction;
  • how to auction.

How to Buy House at Auction

What documents do you want to consult to participate in an auction?

First, if you intend to participate in a court auction you will need to consult the property's expert opinion. This document contains all the essential information about the property, such as the floor plan and the property data, but not only. You can also tell if the property has been subjected to any prejudicial inscriptions, if the owner is biting towards the condo or if there are any building abuses in the house. Remember that you can also consult the expert report online.

What to do before you participate in an auction

If you have decided to participate in an auction, the first thing you will need to check is whether the property has been subjected to a prejudicial situation. This term defines a state of insolvency or default. It occurs, for example, when the house can be rented or on it there is some right of enjoyment such as the use or the loan.

Another, much more serious circumstance, is when there are ongoing lawsuits on the property or even declaratory bankruptcy judgments.

Another aspect to consider is who are the tenants who currently live in the property. You must check whether the sale notice indicates the release of the house at the time of the award or signing of the decree by the judge. Very often those who win a house have to deal with tenants who refuse to abandon it. In these circumstances, the only solution is to use law enforcement to provide eviction. However, it is always better to check this aspect to avoid this practice.

Finally, beware of any building abuses on the property: the new owner remains subject to penalties for any vices committed by the debtor. The offender will still pay, but the municipality or the court will still do it for you to rectified the wrongdoing. For those in this situation, the State has provided through special law the possibility of resorting to a sanitation procedure within 120 days of the act of transfer of the property. However, there is a clause in this article: the debt that generated the auction must be before 30 September 2003.

The same applies to condominium costs: those who take over are obliged to catch up with any morass. So, before submitting an offer, it is good to gather information about it. In this regard, there is legislation that slightly eases the buyer's liability somewhat: it states that the buyer becomes obliged to solidly with the previous owner of the contributions relating to the current year and the year before the acquisition of the apartment.

How an auction works

A judicial auction follows a precise process: first the judge issues the order of sale. This document sets a deadline of 90 to 120 days within which offers to purchase may be offered. It also defines how the deposit should be paid. The auction base is set by the enforcement judge on the basis of the property's estimation assessment.

Finally, the hearing for the decision on the offer and the tender between the bidders is set to the day after the deadline and the notice of the sales order is published both in the news newspapers and on the websites.

Who can participate in the auction

All interested parties, except the debtor, can participate in an auction. The debtor's husband or wife is allowed, however, even if there is legal communion of goods between the two.

The parents or guardians of an underage debtor may not participate.

Those who cannot participate in an auction in person can bid through a special prosecutor.

You can also participate in an auction by staying anonymous, using a solicitor who, in this case, will submit offers per person to be named. In the event of a contract, however, the solicitor will have to declare in the chancellery, in the three days following the award, the name of the person for whom he submitted the offer.

How to auction

After checking all the documentation, it is important to get to the heart of the matter and then understand how it works to buy house at auction. You have to know, in fact, that there are two types of real estate auctions: with enchantment and without enchantment.

The auction with enchantment is the best known one. First, those interested in buying come together. These, in the presence of a batsman, bid from the auction base. The last offer, which is not relaunched for three minutes, wins the property.

This practice, now old, is preferred more and more the auction without enchantment. What does it consist of? Those who want to buy the property present at the stationery, in the day and time indicated by the sale notice, an irrevocable offer in a closed envelope and unrecognizable. A circular cheque with the 10th of the proposed price as a deposit must also be attached to the envelope. The law stipulates that lower bids up to 25 per person may be accepted than the auction base. There are two situations when opening envelopes.

If there are more offers, a competition will be held among all those who have been interested. The auction base will be the highest bid amount.

If, on the other hand, you have a single offer, the property will be added.

Finally, in the event of a deserted auction, another one will be called. With each sale attempt the price will be lowered until the 25th, with the court's ability to halve the price from the fourth attempt forward.

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